House building is lowest in living memory
Did you know we are building fewer houses now than for nearly a century? Well it is certainly a fact that we are!!!!
Says Paul Ainsworth Lord, founder of leading Darwen estate agency Ainsworth Lord Estates, “These figures did make me do a double take when I spotted them I have to say and you’d have to say that the response of the Royal Institution of Chartered Surveyors recently that something ‘bold and drastic’ is needed to get us somewhere near back on track is certainly right.” Source – http://www.guardian.co.uk/money/blog/2012/aug/17/building-homes-housing-shortage
The latest official figures around now reveal just 21,540 new home building starts in England in the second quarter of 2012. This is the lowest number of houses in nearly a century, running at less than a third of the level needed to meet demand.
Says Paul, “The situation is that with a good few people unable to afford to buy a home and the rents rising beyond the reach of many too, means there is something of a potential market failure scenario looming.
The housing shortage is very much beginning to intensify now and is becoming the key area of debate on the property scene throughout the UK as we come towards the end of the summer.
The population of England and Wales is rising rapidly, up by 3.7 million in the past decade according to the latest census figures, the biggest rise since national records began in 1801
Rent inflation up and up
Figures from one of the UK’s biggest lettings agents showed private rents up again in July to an average of £725 a month and the pace of rent inflation is picking up.
Stable house prices
Adds Paul, ‘Locally rents are easing upwards here in Darwen too and indeed in most areas of the North West in general in line with the general UK trend. House prices are stable too and holding steady.
Tough it is
So some therefore, here and throughout the UK, people find themselves between the rock of the steady prices they just can’t afford due to lending and deposit requirements and the hard place of the rising rents. Tough it is for sure! ’
Build to let
The new chat on the block is ‘Build to let’ – that is new build homes, which are for let not purchase, barely tried yet in the UK. Various initiatives by the government, such as the New Homes Bonus – http://www.communities.gov.uk/housing/housingsupply/newhomesbonus/ – are clearly having no impact.
Says Paul, ‘Build-to-let is about increasing supply, which caps rents and has a knock on effect on house prices as a result.’
There’s talk of money for this kind of development being pulled together in some quarters including the giant insurance company Aviva, rumored to be putting together a £1bn fund to invest in new-build for let.
Adds Paul,‘It seems some kind of new approach is needed in what is a very particular market place right now. Watch this space one might say!’.